08/11/2015 12:41 EDT | Updated 08/11/2016 05:59 EDT

Rona Is Booming: Company Raises Dividend On Stronger-Than-Expected Sales


MONTREAL — Home renovations retailer Rona Inc. (TSX:RON) is raising its dividend 14 per cent after reporting that its net profit grew nearly 19 per cent in its second quarter on higher sales.

The Quebec-based company said it earned $49.9 million or 46 cents per share for the three months ended June 28. That's up from $42 million or 35 cents per share a year earlier.

Rona also announced it will pay a quarterly dividend of four cents per share on Sept. 25.

In the past, it paid a 14 cents per share annual dividend distributed twice a year, but it will now move to a quarterly payout.

Revenues increased 5.9 per cent to $1.26 billion from $1.19 billion a year ago.

Rona was expected to earn 45 cents per share on $1.25 billion of revenues, according to analysts polled by Thomson Reuters.

The company says retail sales grew 6.7 per cent due to merchandising strategies and the repositioning of the Reno-Depot banner in Quebec, while distribution sales rose 3.7 per cent.

Retail same-store sales — a key measure for sales from stores open at least a year — grew 5.4 per cent, well above analyst expectations.

Rona CEO Robert Sawyer says the company marked a fourth consecutive quarter of growth despite the ongoing decline in housing starts across the country and a stagnant economy.

Over the past year, the company has repurchased 11 million shares or 9.2 per cent of its outstanding shares.

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